Oil prices rise after US crude inventories fall
However, trade was volatile following the report, with crude futures falling from session highs to lows and then rebounding, as traders digested the data, analysts said.
Brent crude was up 50 cents at $73.94 a barrel by 2:29 p.m. ET, after gaining half a percent on Tuesday. U.S. light crude rose 78 cents, or 1.1 percent, to $69.30, having risen nearly 1 percent in the previous session.
Overall, crude inventories fell by 6.1 million barrels in the week to July 20, EIA data showed, their lowest since February 2015. Analysts had expected a decrease of 2.3 million barrels.
However, much of the headline drop in crude stockpiles occurred in the West Coast.
Kilduff also noted that China has recently been making unusual purchases of Canadian crude, which is often sent to the U.S. West Coast.
U.S. crude imports fell by 2.5 million barrels, continuing a trend of large fluctuations in the nation's purchases of foreign oil.
"That has also caused probably some frustration with interpreting these builds or draws from week to week," said Andrew Lipow, president of Lipow Oil Associates.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, EIA said, their lowest since November 2014.
"The decrease puts the focus once again on tightening supplies here in the U.S. and it also puts the focus on the fact that U.S. gasoline demand is going through the roof," said Phil Flynn, analyst at Price Futures Group in Chicago.
Gasoline stocks fell by 2.3 million barrels, EIA data showed, compared with analysts' expectations in a Reuters poll for a 713,000-barrel drop. Meanwhile, U.S. Midwest gasoline stockpiles fell to their lowest seasonally since 2015.
"Venezuelan oil production has already plummeted to a new 30-year low of 1.5 million barrels a day in June," he said.
Yemen's Houthi movement attacked a Saudi oil tanker in the Red Sea, causing slight damage, the Western-backed Arab coalition said on Wednesday, after the Houthis reported targeting a Saudi warship in the area.
Saudi Arabia and Sunni Muslim allies have been fighting in Yemen for three years against the Iran-aligned Houthis, who control much of North Yemen including the capital Sanaa and drove a Saudi-backed government into exile in 2014.
Oil prices have come under pressure this month as a trade dispute between the United States and China, as well as other major economic blocs, has raised the possibility of slower economic growth and weaker global energy demand as higher tariffs stifle imports.
But the global economy is still growing strongly and it is not clear how the trade dispute may impact business.
Reports that China will increase infrastructure spending have also helped reduce concerns that U.S.-China trade tensions will dent Chinese demand for oil.
— CNBC's Tom DiChristopher contributed to this report.